JERUSALEM – The current wave of political instability in Egypt, Jordan, Lebanon and Syria is forcing Israel’s political and security establishments to revise the Jewish state’s diplomatic and military strategies.

In recent weeks, IDF Chief of Staff Major General Benny Gantz has called for a major military campaign in Gaza with the stated goal of destroying the Hamas regime’s military and political infrastructure. Hamas’s leadership, which openly clashed with Egyptian Field Marshal Tantawi on numerous occasions when deposed President Hosni Mubarak was in power, has close political ties with the Muslim Brotherhood in Egypt and Jordan.

The chaos along the Israeli-Egyptian border in Northern Sinai, which has included numerous sabotage attacks on the Egyptian-Israeli-Jordanian gas pipeline, as well as the Northern Sinai-Eilat corridor, has prompted Israeli Defense Minister Ehud Barak to speed-up construction of a “smart fence” along the nearly 60-mile long Egyptian-Israeli frontier by the end of 2012.

The rapidly deteriorating political situation in Syria has spurred Israel’s defense establishment to build an additional “smart fence” along the Syrian-Israeli border in the Northern Golan Heights, adjacent to the Druze village of Majdal Shams. And with fears of a potential Hizbullah military coup in Beirut should Syrian President Bashar Assad be swept from power in the coming weeks, the IDF has quietly increased its presence along the border with Lebanon.

MK Aryeh Eldad (National Union), a prominent member of the Knesset Foreign Affairs and Defense Committee, said that despite the growing storm clouds around Israel, the country is in a far stronger position than it was on the eve of the Six-Day War, when the leaders of Egypt, Jordan, Lebanon and Syria threatened to destroy the country.

“The difference is that Judea, Samaria, the Golan Heights and all of Jerusalem is in our hands and at this point, it doesn’t appear that Israel will be ceding anymore territory in the near future,” Eldad told The Jewish Press, minutes after emerging from a committee meeting during which Prime Minister Netanyahu made a surprise appearance to update committee members on the new challenges facing Israel.

“And based on what has been happening in Sinai during the past year, there are a growing number of left-wing politicians who have begun to understand that it might have been a mistake for Israel to literally give the Sinai away to Egypt for nothing as part of the peace agreement,” Eldad added.

“Everyone across the political spectrum understands that Israel is going to have to deal with a far more hostile environment in Egypt and even Syria, where it’s quite conceivable that a radical Islamic government could emerge. And King Abdullah in Jordan might not last either, because his country was artificially carved out by the allied powers after World War1, which is not recognized by the Islamists.”

Eldad maintained that based on these emerging threats to Israel, the Foreign Affairs and Defense Committee will probably recommend that Netanyahu increase the defense budget in 2012.

“Though there are lots of budgetary politics involved in this matter,” he said, “the prime minister has to seriously assess the new situation, while the defense minister must understand that the time has come for the IDF to be more transparent. Many things can be done to save money within the IDF without having to trim services or cut back on training. At this point it would be wise for everyone to work together.”

Meanwhile, four Katyusha rockets were fired into northern Israel from Lebanon, the first rockets to be fired on the area since 2009. The rockets fired late Monday night caused damage to two buildings in the western Galilee, and struck a gas tank, causing a fire that took firefighters hours to control. No one was injured in the attacks.

No group has claimed responsibility for the attacks. The Israel Defense Forces do not believe Hizbullah fired the rockets, saying that a smaller faction is likely responsible.

The IDF said in a statement that it holds the Lebanese government and the Lebanese army responsible for preventing attacks on Israel. It also said that the attack is “a blatant violation of UN Resolution 1701,” which ended the Second Lebanon War.

The United Nations International Force in Lebanon said it would maintain calm on the border in the wake of the attacks.

Israel reportedly shelled the area from where the rockets were fired, causing no damage.

On another front, Netanyahu told a Knesset committee he could release frozen Palestinian Authority funds soon.

Netanyahu reportedly told the Knesset Foreign Affairs and Defense Committee on Monday that he is reconsidering holding $100 million in Palestinian tax revenues collected by Israel since the Palestinians have halted their bid to be accepted into international organizations.

Israel has been withholding the tax payments collected on the Palestinians’ behalf since the Palestinians were accepted as a full member of UNESCO, the United Nations scientific and cultural agency. It has continued to withhold them over Fatah-Hamas unity talks.

On Sunday, PA Prime Minister Salam Fayyad said Israel’s suspension of transferring the tax revenue has had a “devastating impact” on the Palestinian economy.

A Netanyahu aide told the Israeli daily Haaretz that Israel does not want to bring about the collapse of the Palestinian Authority, which is one reason that the prime minister is considering releasing the funds.

Meanwhile, May 4 has been set as the date for general Palestinian elections in the West Bank and Gaza, according to reports. PA President Mahmoud Abbas announced the date Monday in Vienna.

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Awad had been released as part of the Gilad Shalit kidnapping deal. Mizrachi’s widow, Hadas, told Israeli reporters that she had opposed the release of murderers as part of any kidnapping deal, and that Awad “deserved the death penalty so he wouldn’t kill again.”

If the abductors’ goal was to force Israeli authorities to release long-serving Palestinian prisoners, the effort backfired as Israeli forces are quickly rolling up what was left of Hamas in the West Bank and are reportedly contemplating the overthrow of the Hamas leadership in Gaza should harm come to the three teenagers.